Limitation of Actions Consultation - Law Commission

organisations which do not benefit from the protection formerly accorded
to public authorities.
(3) The element of risk. It was suggested that public authorities were under a
risk of liability to the public because they are not free to choose the
activities that they undertake. The view of the Law Reform Commission
was that the use of unreasonably short limitation periods for that reason
merely forces injured plaintiffs to subsidise government activity.
13.150 The conclusions of the New South Wales Law Reform Commission are an
example of a general move away from granting special protection to governments
or other public authorities as defendants. It may however be argued that the
potential liability faced by public authorities has now increased to a level which
justifies reinstating the protection previously given to public authorities. The
government’s potential liability under European law for claims relating to
legislation (or failure to legislate) contrary to European law could be said to have
introduced a new factor into the equation. The decisions of the European Court
of Justice in Francovich v Italy 215
and the R v Secretary of State for Transport ex parte
Factortame and others (No 4) 216
have demonstrated the extent of this potential
liability.
13.151 However, this cannot be considered in isolation, as any attempt to grant the
government protection against this class of action alone would appear to be
contrary to European law. 217
If shorter limitation periods are to be allowed for
claims against public authorities they must be introduced on a more general basis.
This would be open to the objections cited above which have led to the repeal of
such measures throughout the common law world: that it is unjust to plaintiffs to
bar meritorious claims against the state, where claims against another defendant
would be allowed to proceed. The financial arguments in favour of such
protection may be strengthened by the increased potential liability facing the
government, but it is not clear that they are overwhelming. It could be argued that
using a shorter limitation period to bar meritorious claims against the government
appears to transfer the financial burden of such claims from a group with
substantial resources (taxpayers) to potential plaintiffs (a group with limited
resources).
13.152 We considered an analogous issue in the context of our report “Restitution:
Mistakes of law and Ultra Vires Public Authorities Receipts and Payments”, 218
namely whether there should be shorter time limits for claims for the recovery of
money paid to public authorities under a mistake of law or in response to an ultra
vires demand. We suggested in the consultation paper that though the ordinary
limitation period might not be appropriate for claims against central governmental
215 (1991) ECR 1-5357
216 Case C-48/93, [1996] QB 404.
217 Which holds that national law governing liability for community law damages must not be
less favourable than it is for equivalent domestic claims. See Rewe Handelsgesellschaft Nord
mbH v Houptzollamt Kiel (Case 158/80) [1981] ECR 1805 (see in particular p 1838) and
Case 199/82, Amministrazione delle Finanze dello Stato v SpA San Giorgio [1983] ECR 3595.
218 Law Com No 227 (1994) Cm 2731.
373